Singapore’s shares appear set to follow a global market selloff on Friday, with Asia markets opening weaker after Wall Street dropped on Wednesday.
Traders globally appear to be shrugging off decent earnings reports, in favor of focusing on worries including the U.S. trade war, the weaker Chinese yuan and the U.S. Federal Reserve’s apparent resolve to continue its gradual pace of interest rate hikes.
“Global markets are enveloped in a classic case of risk aversion with all the main risk off hallmarks showing up in virtually every corner of the market,” Stephen Innes, head of Asia Pacific trading at OANDA, said in a note on Friday. “North American traders read negatively into the [U.S. Treasury Department] focus on China rather than the fact the report didn’t step on anyone’s tail.”
In a report released on Wednesday U.S. time, the Treasury Department avoided labeling China a currency manipulator, but said the weaker Chinese yuan would likely worsen the U.S. trade deficit.
Other analysts also pointed to yuan weakness as a factor in recent market ructions.
“Inherently, the escalating trade tensions with US is yuan-negative with moves further magnified on a speculative basis by the market,” Jingyi Pan, market strategist at IG, said in a note on Friday.
“While a weaker currency promotes export competitiveness, the outflows and destabilizations from the sharp falls certainly do not appear to be in China’s favor. Indeed, changes in their reserves and the fixing trend had previously reflected the interest to defend the currency weakness,” Pan said.
Japan’s Nikkei 225 was off 1.71 percent at 8:26 A.M. SGT, while South Korea’s Kospi fell 1.32 percent by 8:31 A.M. SGT.
Singapore’s Straits Times Index ended down 0.05 percent at 3069.67 on Thursday; October futures were at 3067 on Thursday, while November and December futures were at 3070 and 3068 respectively.
Hong Kong’s hang Seng index edged down 0.03 percent to 25,454.551 on Thursday, while China’s CSI 300 fell 1.83 percent to 3044.392.
Malaysia’s KLCI index shed 0.15 percent on Wednesday to 1738.01, while Indonesia’s IDX Composite shed 0.40 percent to 5845.24.
The Dow Jones Industrial Average fell 1.27 percent to 25,379.45, the Nasdaq Composite dropped 2.06 percent to 7485.139 and the S&P 500 lost 1.44 percent to 2769.78; futures for the three index were nearly flat.
The U.S. dollar index, which measures the greenback against a basket of currencies was at 95.96 at 8:14 A.M. SGT, after flirting with the 96 level on Thursday, according to ICE futures data.
The 10-year U.S. Treasury note yield was at 3.174 percent at 8:24 A.M. SGT after touching levels as high as 3.216 percent on Thursday before spiking down to as low as 3.162 percent, according to Tullett Prebon data.
The euro/dollar was at 1.1455 at 8:27 A.M. SGT after trading in a 1.1448 to 1.1527 range on Thursday, according to DZHI data.
The dollar/yen was at 112.23 at 8:28 A.M. SGT after trading in a 111.936 to 112.731 range on Thursday, according to DZHI data.
The dollar/yuan ended Thursday at 6.9366 after trading in a 6.9262 to 6.9419 range during the session, according to DZHI data.
The dollar/Singapore dollar was at 1.3815 at 8:28 A.M. SGT after trading in a 1.3767 to 1.3821 range on Thursday, according to DZHI data.
The dollar/Malaysian ringgit was at 4.1600 at 8:02 A.M. SGT after trading in a 4.1490 to 4.1570 range on Thursday, according to DZHI data.
The dollar/Indonesian rupiah ended Thursday at 15,192 after trading in a 15,150 to 15,200 range during the session, according to DZHI data.
Nymex WTI crude oil futures for November were up 0.25 percent at US$68.82 a barrel at 8:03 A.M. SGT, while ICE Brent crude futures for December were up 0.24 percent at US$79.48 a barrel at 8:03 A.M. SGT, according to Bloomberg data.